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Domestic and Foreign Price/Marginal-cost Margins: an Application to Spanish Manufacturing Firms

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  • Lourdes Moreno
  • Diego Rodríguez

Abstract

The authors investigate the differences in margins of export and domestic markets for Spanish manufacturing firms in the period 1990 to 1997. They estimate jointly a multiproduct cost function, a variable factor share equation, and two price/marginal-cost margin equations. The results indicate that the marginal cost of production sold in export markets is slightly greater than in domestic markets. At the same time, the price/marginal-cost margins in export markets are smaller than in domestic markets. There is also strong evidence that margins are procyclical in domestic markets, but this evidence is less clear in foreign markets. Copyright Blackwell Publishing Ltd 2004.

Suggested Citation

  • Lourdes Moreno & Diego Rodríguez, 2004. "Domestic and Foreign Price/Marginal-cost Margins: an Application to Spanish Manufacturing Firms," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 60-80, February.
  • Handle: RePEc:bla:reviec:v:12:y:2004:i:1:p:60-80
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    References listed on IDEAS

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    1. Julio J. Rotemberg & Michael Woodford, 1991. "Markups and the Business Cycle," NBER Chapters,in: NBER Macroeconomics Annual 1991, Volume 6, pages 63-140 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Sarah Guillou & Stefano Schiavo, 2010. "Export Prices and Increasing World Competition: Evidence from French, German, and Italian Pricing Behaviour," Chapters,in: Innovation, Economic Growth and the Firm, chapter 10 Edward Elgar Publishing.
    2. Moreno, Rosina & Lopez-Bazo, Enrique & Artis, Manuel, 2002. "Evaluating the optimality of Spanish industry (1980-1993)," ERSA conference papers ersa02p353, European Regional Science Association.
    3. Lourdes Moreno & Diego Rodríguez, 2011. "Markups, Bargaining Power and Offshoring: An Empirical Assessment-super-1," The World Economy, Wiley Blackwell, vol. 34(9), pages 1593-1627, September.
    4. Diego Rodriguez & Lourdes Moreno, 2013. "The effect of international trade on markups distribution," Economics and Business Letters, Oviedo University Press, vol. 2(1), pages 33-41.
    5. Jean-Luc Gaffard & Evens Salies (ed.), 2010. "Innovation, Economic Growth and the Firm," Books, Edward Elgar Publishing, number 13101.
    6. repec:spo:wpecon:info:hdl:2441/6123 is not listed on IDEAS

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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